French President Emmanuel Macron attended on Thursday (30 January) the ground-breaking ceremony for a new battery factory in southwest France: the first real result of an EU-led policy aimed at boosting the industry and helping it withstand global competitors.
Battery production is big business in Western Europe, which is gearing up for a large-scale transport switch from combustion engines to electric power. That is why France and Germany joined forces in order to compete against Southeast Asia’s market leaders.
The pilot plant, located in Nersac, is due to start production in mid-2021 as part of cross-border cooperation encouraged by the EU’s Battery Alliance.
“It is a European ambition, an industrial ambition, which is also climate-focused,” Macron said at the factory’s launch, dubbing the efforts “the Airbus of electric batteries”.
Finance minister Bruno Le Maire said at the same ceremony that the pilot plant would eventually employ 200 people and that another planned factory in Douvrin, northern France, would need 2,000 workers as of 2022.
Germany will also open a plant in 2024 that will employ the same amount of people.
Le Maire added that the plans “prove that Europe is capable of building its technological and therefore political sovereignty in the face of China and the United States”.
The Franco-German industrial boost is backed by the European Commission, which in late 2019 signed off on a so-called Important Project of Common European Interest (IPCEI). It means that the most stringent EU state aid rules will not apply to approved schemes.
Seven EU countries, including France, Germany and Sweden have a total of €3.2 billion in subsidies to play with, while another IPCEI reportedly involving more countries is still awaiting approval.
Commission Vice-President Maroš Šefčovič tweeted that “the European Battery Alliance is bearing fruit, thanks to our French and German partners. European production based on innovation with thousands of jobs at stake.”
Go cars go
The pilot plant launch also saw French energy giant Total, which owns the firm that will run the Nersac factory, team up with the Peugeot Citroen PSA group. The joint venture aims to produce one million electric vehicle batteries by 2030.
“That will be around 10 to 15% of the market and will require €5 billion in investments. It is an important bet,” said Total CEO Patrick Pouyanne. PSA-subsidiary Opel will benefit from the German battery plant.
More than €1 billion investment will come from the €3.2 billion that was approved by the Commission in December.
PSA confirmed in late 2019 that a proposed merger with Fiat Chrysler (FCA) would move ahead, after both firms agreed on terms. FCA was on the look-out for more tie-up opportunities after a deal with Renault fell through earlier in the year.
Although the nitty-gritty of the agreement is still under wraps, it is common knowledge that FCA wanted to tap into the electric vehicle know-how of first Renault, and then PSA. In return, it can offer lucrative US-market penetration.
[Edited by Zoran Radosavljevic]